How To Do Annual Business Planning

I find that many in the commercial real estate finance industry rarely do any annual planning for their businesses – both individually and/or as a team. I understand that they are largely transactional professionals who are reactive and tactical (rather than proactive and strategic), but didn’t the rabbit in Alice in Wonderland say, “If you don’t know where you are going, any path will get you there”?

What happened to the simple benefit of focus that you get when you plan your work and work your plan?

When I managed businesses, planning for the following year began in the middle of the previous year. Here’s the rough schedule I would use to make sure everything was planned and thoroughly fleshed out before the start of the next year:

We also conducted performance reviews, followed by raises and bonuses; these were done after the Individual goals and objectives were completed, by February 15. Raises were retroactive to January 1, and bonuses were paid by March 1. This calendar approach kept associates aligned and in the loop. It’s proven to me year after year, company after company, executive team after executive team, that it works!

Before starting on the context word or phrase in August, I have come to encourage teams (and individuals) to complete the Intended Future Framework. What’s great about this exercise is that it can be used for career management, self-management, or problem-solving to determine next steps, whether professional or personal. If done with the group, folks can identify with the elements of a Fantasy Intended Future in a “feelings” way. This engagement is ‘stickier’ than the ‘thinking way’ of solid, measurable metrics. Over the years, I have set the goals to follow the feelings of the fantasy and gotten better results.

The Intended Future Framework is essential for figuring out what’s most important, WHY it’s important, and how to get from where you are to where you want to be.

1. Pick a point in the future (a year, 2 years, 5 years, or more) and close your eyes (this is critical!). Dream about your future, and then write down every element present that you see around you.
2. Set the paper down and come back to it a week or so later. What’s your Current Reality? This is the time for radical candor with yourself: inventory the good, the bad, and the ugly.
3. A week or so later, pick up the paper again and compare the Intended Future with the Current Reality; then start creating the transition plan to bridge the gap between your Current Reality and your Intended Future.

Your Intended Future planning isn’t just about writing down a concrete plan for what you want in the future, but about figuring out WHY you want what you want. When you close your eyes, you allow yourself the privilege of fantasy, envisioning the possible outcomes from the sale(proposed source activity) or whatever ‘endgame’ you are envisioning. Freedom, flexibility, and time, to name a few. Too often, people get so focused on the “what” that they lose sight of the “outcome” and what comes after that.

In an ideal situation, you’d use the Intended Future Framework, but in my experience, Intended Future planning is never easy. In fact, I devoted an entire chapter in my book to this process! I find that if I can get the team to anchor on the lifestyle outcome elements that they would be “bathing in” while working on a platform that successfully does X, Y, Z, they will own the results of a planning process entirely, so that they have what it takes to fight through collective obstacles that arise.

If you’re unable to commit to the Intended Future Framework, I sometimes use an abbreviated version of the planning process with the leadership team for companies. Here’s the question to ask yourself instead:

• When you fantasize about platform success down the road, what are 5-10 inventoried elements (outcome benefits) that the platform could be enjoying when that Intended Future is reached?

After having teams work on their Intended Future process, I then ask the question:

• If these Intended Future elements serve as an abbreviated end state for a future point in time, what are 3-5 context words for the next year that could act as guardrails for the platform as it focuses on what it needs to accomplish?

Words that have been used in the past by my teams or other teams include: growth, relationships, revenue, small balance, bridge, lead the market, react to the market, and radical candor. Think outside the box and consider how these context words will act as guardrails for you in the upcoming year.

Now that you’ve completed the Intended Future Framework and identified your context words, it’s time to establish 3-5 milestones you need to achieve over the next 3 years (by 12/31/28). From there, work backward and ask yourself:

1. What would you like to have accomplished by 12/31/2028?
2. Then what has to happen by 12/31/2027 to make this true?
3. Then what has to happen by 12/31/2026 to make this true?

It is the last piece answer – What has to happen by 12/31/2026 to make this true? – that then needs to be framed into the 2026 Corporate Goals and Objectives.

This is when company planning really starts to get fun! It’s time to get into the nitty-gritty and map out what you want to accomplish in the next year. This includes putting together Department Goals and Objectives and an Implementation Plan that makes all of this possible, including figuring out a budget that supports your plan.

If you are following this “Cascade for Planning”, you might be disappointed to realize that you actually can NOT operate a business day to day based on the cascade of goals and objectives. For that, I turn to OKRs.

OKRs are about getting the projects (typically 3-8 weeks in duration) done (source activities) that accumulate to achieve your organization’s goals. It looks at how a teammate’s progress on one activity relates to, drives, and interrelates with another teammate’s progress on their activity. In a sense, OKRs are a collaborative communication tool. Effective work on OKRs requires safety, interdependence, (complete) honesty, and accountability. If one person isn’t pulling their weight, the whole team could fall behind, and that impacts timelines, deadlines, and overall progress.

Again, I refer you to the chapter in my book on OKRs and Goals and Objectives. The easiest way to describe OKRs is through the lens of a football team: the head coach’s objective is to win the Super Bowl. But to do so, the offensive, defensive, and special teams must achieve certain results. If one falls behind, it will be hard for the whole team to reach the Super Bowl.

• Head coach (CEO): This individual establishes overarching objectives and key results
• Offensive, defensive, and special teams (Departments): They set their own objectives and key results that they want to achieve in order to support the Head Coach’s OKRs.

These OKRs then trickle down to the players, doctors, trainers, and other staff (individuals at a company). It takes everyone to ultimately achieve the head coach’s objective of winning a Super Bowl.

Word of Caution: OKRs are not corporate goals and objectives! Those are different and should be established beforehand. OKRs are primarily used to accomplish projects and tasks outside one’s daily job, lasting three to six weeks, and are used by teams working on projects that represent aspects of a larger project.

Planning is a must. Plan your work; work your plan. But I have to admit, any planning, even partial planning, is better than none. Once answers are in place, call your team together and present the elements of the Intended Future, the context word guardrails, and the 3-5 milestones you seek to achieve to the rest of the company. Ask the team: “What does this mean to you?” Then you can move on to your Department Goals and Objectives and ultimately your OKRs. It has been said, “The best original ideas belong to others”; so I like to add, “Steal freely!” If this, or a version of this, resonates for you and your leadership style, you are welcome to it. If you need more of a workbook guide, feel free to buy my book, The Freedom Frameworks, for yourself and your team on whatever platform you use. And, if you are old-fashioned and like the personal touch, reach out to me! I am willing and able to help you with this process.

It has been said, “The best original ideas belong to others”; so I like to add, “Steal freely!” If this, or a version of this, resonates for you and your leadership style, you are welcome to it. If you need more of a workbook guide, feel free to buy my book, The Freedom Frameworks, for yourself and your team on whatever platform you use. And, if you are old-fashioned and like the personal touch, reach out to me! I am willing and able to help you with this process.

Wishing you the best as you prepare for a prosperous 2026.